Yen Surges to Seven-Month High as Dollar Drifts Ahead of US Inflation Report

The yen has surged to a seven-month high against the US dollar, reaching 154.05 yen as of Monday. This marks its weakest level since February and breaks below lows reached in August after Washington and Tokyo jointly intervened to support the Japanese currency.

According to Lee Hardman, senior currency analyst at MUFG, 'So far this year, when we have seen the yen strengthen following bouts of intervention, that 155 level was where dollar/yen tended to bottom out. Breaking past that level is a bullish signal and we could see further upside for the yen.'

The main event this week is Friday's US inflation report, which will shape the Federal Reserve's decision on whether to raise interest rates later this month.